FC Lahti was founded in 1996 when two rival clubs from Lahti – FC Kuusysi and Reipas Lahti (founded in Viipuri and moved to Lahti after Viipuri was ceded to USSR in 1947) – decided to merge and create a new club to make the people of Lahti proud. Also, the reserve club FC Pallo-Lahti was formed, but it was closed down after a couple of seasons due to economic difficulties. Both Reipas and Kuusysi controlled the junior section of the club.
FC Lahti played its first season in 1997, in the southern group of Ykkönen, the second tier of Finnish football. It finished second in the first half of the split league format Ykkönen but was placed third in the final half, behind FC Haka and PK-35, both of which were promoted to Veikkausliiga. The next season, 1998, saw success and FC Lahti finally gained promotion to the highest tier. They were relegated at the end of the 2010 season.
In the premier division, Lahti has not yet achieved the success of Kuusysi and Reipas. In 2007 Lahti won the Finnish League Cup. In 2008 FC Lahti was third in the Veikkausliiga final table and was placed in the UEFAEuropa League qualification rounds for season 2009.